ALPS Active Equity Opportunity ETF Sees Significant Drop in Short Interest

Short sellers are beating a rapid retreat from the ALPS Active Equity Opportunity ETF (NYSEARCA: RFFC), according to the latest settlement-date data. Filings show that as of 27 February, total short interest stood at just 796 shares, down 50.5% from the 1,609 shares recorded on 12 February. With the fund’s average daily trading volume hovering around 670 shares, the resulting days-to-cover ratio has fallen to a wafer-thin 1.2, leaving bearish investors with little room to maneuver.

The modest short base now represents only 0.2% of the ETF’s outstanding stock, underscoring a broader loss of downside conviction in the actively-managed vehicle. RFFC, which screens U.S. equities for value, quality and momentum characteristics, has seen its market price drift lower in recent sessions; the units slipped 94 cents on Thursday to close at $67.53 on volume of 1,142 shares—above the trailing 30-day average turnover of 790. The fund remains squarely between its 50-day ($69.52) and 200-day ($66.64) moving averages, while year-to-date trading has been contained within a 52-week range of $49.26 to $71.28.

Institutional managers, meanwhile, have used the relative calm to build positions. Elevated Capital Advisors opened a new stake during the fourth quarter worth roughly $163,000, and Main Street Financial Solutions initiated a $308,000 position in the second quarter. Arsenal Capital Advisors purchased $450,000 of the ETF in Q4, while Envestnet Asset Management added 1,016 shares in the third quarter, lifting its holding to 11,057 shares valued at $710,000. Sponsor-affiliated Alps Advisors Inc. also raised its exposure by 7.6% in the December quarter, bringing its total to 165,685 shares, or about $11.1 million at current pricing.

With assets under management of $27 million and a beta of 0.96, RFFC offers a broad-based, flex-cap play on U.S. equities. The fund’s P/E ratio of 25.0 sits close to the large-blend category average, suggesting managers have not chased extended valuations even as they rotate among cyclical and defensive sectors. RiverFront Investment Group, which has steered the portfolio since its June 2016 launch, employs a tactical overlay that can shift weightings in response to macro signals—a feature that appears to have limited short seller appetite during the recent volatility.

The sharp contraction in bearish bets, combined with steady institutional inflows, could set the stage for a tightening supply-demand balance should sentiment toward domestic equities improve. For now, traders will be watching Thursday’s below-average volume and the fund’s ability to hold the $66-$67 support zone as the next catalysts emerge.